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Pacific Electric Company (PECO), a Northern Californian power company, is currently unable to produce sufficient power to meet customer demand during peak time periods, leading
Pacific Electric Company (PECO), a Northern Californian power company, is currently unable to produce sufficient power to meet customer demand during peak time periods, leading to widespread 'brownouts'. PECO is considering raising the price of power during the peak time period and lowering the price of power during the off peak time period. From past experience, PECO knows that the own price elasticity of demand for power used during the peak time period is -0.25 and the cross price elasticity of demand for power using during the peak period with respect to a price change for off peak electricity is 0.10.
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